2017 (4) TMI 1481

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....the manufacture of various excisable goods including "NESLAC Nutritious Milk Drink for growing kids". The appellant cleared the goods without payment of duty buy classifying the same under tariff item 0404 90 00 of the Central Excise Tariff Act, 1985. However, the department was of the view that the addition of flavour in the product would take it out of CETH 0404. Accordingly, the department sought the demand of duty on the NESLAC Nutritious milk drink classifying the same under tariff heading 1901. After issuing the show cause notice, the department has demanded the duty. Being aggrieved, the present appeal is filed by the appellant. 3. With this background, we heard Sh. Anurag Kapoor, ld. Advocate for the assessee and Shri M.R. Sharma....

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....he product in Chapter 4. HSN Notes also make it clear that product would fall under Chapter 1901 only when natural milk constituents are added with other items such as cereal, groats, yeast etc. or the milk constituent is replaced by another substance such as oleic fats. From what is stated before us, we are convinced that this is not a case. Addition of small quantity of artificial flavouring substance does not change the essential nature of the product from what is covered under 0404. It does not make it a food preparation of milk instead of a "product consisting of natural milk constituent". In this view of the matter, there is no justification to shift the classification of the main product from 0404 to 1901, on account of addition of a....